Case Study: Nordstrom

Due to global competition, there is a variety of products that are competing in different markets ranging from apparel to computers. Despite the many benefits that these products might provide to customers, this phenomenon is making it more difficult for retailers and manufacturers to predict which of their goods will sell effectively.
According to Schermerhorn (2013), “forecasting is the ability to predict the future” (pg.123) which means that the process of forecasting can become an important tool to quantify the proper balance between supply and demand. Likewise, in order to maximize sales and its effectiveness, businesses have to work in predict the future customer demand and use this information to lead the business operations to distribution effectively. However, inaccurate forecasts happen and along with them there is a cost.
In the case of Nordstrom, providing products in response to the current level of customer demand with a minimum of overstocking reduces stocking costs and distribution expenses, leads
But this company has not only relied in demand forecasting, it has also make the supply chain more flexible and faster so their scheduling systems can match supply with demand. Even though the company has reduced prices in certain items in order to remain competitive with other retailers, the integration of the perpetual inventory has put Nordstrom ahead of any other department store without compromising what should be a priority for any business: an excellent customer service.
On the other hand, Nordstrom has identified many effective strategies from other retailers in order to improve and prosper without failing along the way. They have identified what the customer wants and/or needs in an uncertain economy. Also, their inventory management process has become a long-term investment which other retailers like Macy’s or Saks have not been able to